PARIS (Reuters) - Shares in LVMH (LVMH.PA), the world’s biggest luxury goods group, hit a record high on Tuesday after the French company beat sales forecasts in the first quarter and said demand from Chinese customers had picked up.
Shares in LVMH - whose array of brands ranges from fashion houses Louis Vuitton and Christian Dior (DIOR.PA) to watchmaker TAG Heuer and jeweller Bulgari - rose as much as 2.9 percent to an intraday record high of 213.50 euros (183.20 pounds) before easing back to close 0.41 percent higher.
Other French luxury good stocks also rose in early trading, including Kering (PRTP.PA) and Hermes (HRMS.PA), but also gave up most of their gains by late afternoon. Switzerland’s Richemont (CFR.S) closed 1.9 percent higher.
LVMH, which like the wider industry has benefited from a progressive recovery in Chinese appetite for luxury goods after an economic slowdown, warned however that its strong first-quarter performance may not be sustainable.
It compared to a weaker start to 2016, in the aftermath of attacks in France which deterred some tourists and shoppers in Europe.
LVMH has also stressed that its broader business outlook remained uncertain, at a time when Donald Trump’s rise to power in the United States has added to jitters for companies and markets over what Britain’s decision to leave the European Union will bring.
“We are just sending a word of caution on this so that the market end doesn’t getting carried away with the current strong numbers,” Chief Financial Officer Jean-Jacques Guiony told a conference call.
LVMH reported a 15 percent year-on-year increase in first quarter sales after the stock market had closed on Monday, beating the consensus market forecast.
Guiony said Chinese shoppers were the “driving force” behind a 20 percent rise in Asian like-for-like revenues, which excludes Japan.
European sales also rose strongly, at a time when the group said it was eyeing slight price increases on fashion products in the region, and LVMH reported increased revenues across all of its units, which includes wine and spirits.
“What was truly impressive though is that all divisions were up double-digit, which was last seen in Q1, 2011,” Deutsche Bank analysts said in a note, keeping a “buy” rating on LVMH shares.
LVMH’s Guiony warned that buoyant sales in its cognac labels “cannot go on like we are today forever”, but he added that stock would be sufficient to meet demand in spite of some constraints on its availability.
Editing by GV De Clercq